NYT: Obama letting big corporations off the hook with ObamaCare waivers

posted at 9:30 am on October 7, 2010 by Ed Morrissey

Actually, that’s closer to the headline on MSNBC’s reprint (“White House allows big firms to dodge health reforms”) of this New York Times article than the one in the Times itself (“Waivers Address Talk of Dropping Coverage”), but the meaning is plain either way.  Instead of enforcing the ballyhooed standards and mandates for insurers that Congress passed in ObamaCare, Kathleen Sebelius and the White House blinked in the face of bad press and exempted dozens of companies from the law.  If the marketplace had uncertainty before, the administration has made the situation much, much worse:

As Obama administration officials put into place the first major wave of changes under the health care legislation, they have tried to defuse stiffening resistance — from companies like McDonald’s and some insurers — by granting dozens of waivers to maintain even minimal coverage far below the new law’s standards.

The waivers have been issued in the last several weeks as part of a broader strategic effort to stave off threats by some health insurers to abandon markets, drop out of the business altogether or refuse to sell certain policies.

Among those that administration officials hoped to mollify with waivers were some big insurers, some smaller employers and McDonald’s, which went so far as to warn that the regulations could force it to strip workers of existing coverage. ….

To date, the administration has given about 30 insurers, employers and union plans, responsible for covering about one million people, one-year waivers on the new rules that phase out annual limits on coverage for limited-benefit plans, also known as “mini-meds.” Applicants said their premiums would increase significantly, in some cases doubling or more.

These early exemptions offer the first signs of how the administration may tackle an even more difficult hurdle: the resistance from insurers and others against proposed regulations that will determine how much insurers spend on consumers’ health care versus administrative overhead, a major cornerstone of the law.

First, let’s point out that the law turned out to be unworkable, almost before it even got started.  Dictating percentages for administration costs in insurance plans isn’t the job of the federal government anyway, but more to the point, that issue is obviously not determinative in value to the consumer — as these waivers proved.  This shows what happens when people with no experience in an industry decide that they can construct it better than the market has structured itself.

The proper action would have been to repeal at least this portion of the law in order to give a level playing field to everyone.  By granting a few dozen waivers at the outset, though, the White House has amplified the uncertainty and arbitrariness in ObamaCare even further.  At least insurers and employers had a figure that they could use for planning.  Now there is no standard at all, except for whatever Kathleen Sebelius decides she likes — and whom she wants to favor.

The Rule of Law depends on an environment with clear regulation and unbiased enforcement.  From the start, ObamaCare lacked any clarity in regulation.  Congress filled the bill with the phrase “The Secretary shall determine” in place of establishing rules and regulations for the massive regulatory regime Congress created.  Now, the White House has added arbitrary enforcement to uncertain regulation and opaque processes.  This is not the Rule of Law, but the Whim of Autocracy.


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Comment pages: 1 2

So lemme get this straight. . .

The LLC’s, LLP’s, S Corps and sole pro’s are getting a 5% tax increase and have to pay for Obamacare.

The C Corps get bailouts and are exempt from Obamacare.

Jason Coleman on October 7, 2010 at 12:45 PM

…and crr6 says it’s over the top to label Obama fascist.

What evidence does an educated idiot need?

Saltysam on October 7, 2010 at 12:41 PM

Excellent Post!..You may pick up your waiver pending a nice contribution to the Democrats..:)

Dire Straits on October 7, 2010 at 12:46 PM

Winners and Losers…………..

……Sebelius……you pick.

PappyD61 on October 7, 2010 at 12:49 PM

We cannot let these people keep picking the winners and losers. They are killing DEATH PANELINGus.

Cindy Munford on October 7, 2010 at 9:37 AM

FIXED IT.

PappyD61 on October 7, 2010 at 12:51 PM

How much dollar support for Obama’s reelection campaign will be required for a second year waiver?

GaltBlvnAtty on October 7, 2010 at 12:55 PM

In socialism/communism all are equal; some, like crr6 and these companies, are more equal than others.

Schadenfreude on October 7, 2010 at 12:57 PM

I’m fine with ObamaCare. I think US Business have generally just failed to step up to their responsibilities.

Jimbo3 on October 5, 2010 at 12:03 PM
Chuck Schick on October 7, 2010 at 11:22 AM

I wonder what that clown thinks a business’s “responsibility” is? that’s the problem with leftists, they think that the purpose of any business is to employe people and give benefits. Which is why they don’t understand economics. And, they believe that all business has money to burn on their little schemes.

Monkeytoe on October 7, 2010 at 12:59 PM

UPDATE:

Obama To Veto H.R. 3808

ZenDraken on October 7, 2010 at 1:35 PM

How about repealing this crappy legislation?

C’ mon, if more than 2 employers need waivers…

darkpixel on October 7, 2010 at 1:41 PM

And even some state regulators, like Ms. Voss, whose state has formally requested a federal waiver to allow Iowa to decide case by case what considerations to give individual carriers, acknowledges that some plans should be allowed to leave the market. “I don’t think my job as a commissioner is to make sure every company is viable forever,” Ms. Voss said.

Nice. I wonder whose job it is to write the legislation that may negatively affect a company’s viability, which Ms. Voss can then disclaim any liability for.

Tonus on October 7, 2010 at 1:45 PM

If you needed any more evidence that this clown is in bed with Big Corporate, here it is.

Dark-Star on October 7, 2010 at 1:53 PM

USDA has done this with large slaughter/packing operations.
USDA lets these guys off the inspection hook by letting them monitor themselves for contamination.
Meanwhile, USDA send inspectors to small butcher shops who buy the boxed beef from the big guys, where the contamination occurs & when they fins something like an E-coli outbreak, it is the small guy who gets shut down-not the big guy-where the contamination occurs in the 1st place.
Feel any safer?

Badger40 on October 7, 2010 at 2:04 PM

Absolutely. They will have a huge competitive advantage.

jwolf on October 7, 2010 at 11:42 AM

Which is why us small-frys in all small business repeatedly get MORE scrutiny from govt agencies in matters of compliance & why small business keeps getting smaller & the big businesses keep getting bigger.
Vertical integration is NOT the reason why huge corporations keep getting bigger & bigger, so as to retain efficiency.
They get PERKS.
And so we are put out of business & must then go & work for them.

Badger40 on October 7, 2010 at 2:17 PM

Then why is it necessary for 3M to screw over its retirees?

jeanie on October 7, 2010 at 2:26 PM

If you like your doctor, well, you’d better hope we like your employer.

We are rapidly approaching the point where we won’t be able to vote ourselves out of this mess. Don’t screw up in November. Explain how this works to your less-interested friends, tell them about the waivers and what they mean to competition, and political donations, and political power.

We joke, but this isn’t funny.

Merovign on October 7, 2010 at 2:34 PM

So, once again, middle class will carry the load, since the big businesses will be “waived”…but someone has to pick up the tab…the democrats, yeah, looking out for the “common people”.
Does anyone, liberal or other actually believe that the democrats only find to constituents worth wooing…the out of work, and corporations.

right2bright on October 7, 2010 at 3:12 PM

Now where are the liberals trolls that need to defend Obama…why don’t they ever show up except on Palin posts.
Palin envy?

right2bright on October 7, 2010 at 3:26 PM

Dictating percentages for administration costs in insurance plans isn’t the job of the federal government anyway, but more to the point, that issue is obviously not determinative in value to the consumer — as these waivers proved. This shows what happens when people with no experience in an industry decide that they can construct it better than the market has structured itself.

Ed, a lot of industries are regulated when market forces cannot effectively control price gouging. In states with 1 or 2 insurance companies, you have a situation similar to an electrical utility.

This bill represent a serious of compromises and half measures. In any case, no bill of this magnitude is going to be perfect out of the gate. At least the waivers are being granted liberally so that people don’t lose insurance. In your previous blog post, isn’t that what you called for?

Some of the best health insurance coverage in this country- and among the most cost effective- comes from the VA. Given the low budget of the VA, the quality of care is outstanding. (I know both docs and vets who strongly agree with that assessment.)

bayam on October 7, 2010 at 4:37 PM

individual liberty prospers greatly when the government intervenes in the market to pick winners and losers

/average democrat statist

Inanemergencydial on October 7, 2010 at 4:40 PM

Where is crr6 to defend the inequality?

Schadenfreude on October 7, 2010 at 4:44 PM

This bill represent a serious of compromises and half measures. In any case, no bill of this magnitude is going to be perfect out of the gate.
bayam on October 7, 2010 at 4:37 PM

So, Congress had to pass it so we would know what was in it, huh? Thanks.

kingsjester on October 7, 2010 at 4:46 PM

I just got an email from Politico that says a MN judge upheld the Constitutionality of the individual mandate.

hawksruleva on October 7, 2010 at 4:48 PM

Uh…just how do you waive a federal law?

What keeps POTUS from waiving residents of California from paying federal income tax?

“I waive your taxes”

“I grant you a waiver from the law”

“Kiss the back of my hand, and I’ll waive your conviction”

“Yes I can”

BobMbx on October 7, 2010 at 4:48 PM

Ehh- make that Michigan, not Minnesota.

hawksruleva on October 7, 2010 at 4:49 PM

More “too big to fail” crap.

Glad to know these companies are so special.

molonlabe28 on October 7, 2010 at 4:58 PM

Some of the best health insurance coverage in this country- and among the most cost effective- comes from the VA. Given the low budget of the VA, the quality of care is outstanding. (I know both docs and vets who strongly agree with that assessment.)

bayam on October 7, 2010 at 4:37 PM

I know both docs and vets who strongly disagree with your assessment. Plenty of them, as a matter of fact.

Del Dolemonte on October 7, 2010 at 5:13 PM

Seriously, explain to me how this differs from Nazi economic policy?

Knott Buyinit on October 7, 2010 at 6:08 PM

Kathleen Sebelius and the White House blinked in the face of bad press

Out of the frying pan and into the fire. Uncertainty and fear dominate the economy. Hard times ahead.

petefrt on October 7, 2010 at 6:17 PM

So far little about this legislation is positive.It can only get worse.

jeanie on October 7, 2010 at 6:18 PM

Sequidiot- where are you? We need some of your wit and wisdom on this topic too. /

CWforFreedom on October 7, 2010 at 6:23 PM

In socialism/communism all are equal; some, like crr6 and these companies, are more equal than others.

Schadenfreude on October 7, 2010 at 12:57 PM

:-) And then the Soviet Union fell…

yubley on October 7, 2010 at 6:59 PM

Then why is it necessary for 3M to screw over its retirees?

jeanie on October 7, 2010 at 2:26 PM

You really need to let that go. Are you a 3M retiree? You sure as heck seem like it as you are on about them dropping retiree healthcare 24/7, healthcare they are not required to provide. As I have responded to you in previous threads, 3M is only doing exactly what Federal Law requires them to do. They have identified a negative risk to their shareholders and they are responding in the only way they are allowed to by Federal Law, by dropping the retirees from their healthcare. If they do not drop them, they are opening themselves up to Federal lawsuits from both their shareholders and the Fed. They have no option, but to do this.

Johnnyreb on October 8, 2010 at 3:21 PM

All animals are equal. Some are just more equal than others.

riverrat10k on October 8, 2010 at 4:34 PM

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